Filipino crypto valley issues a new securities token exchange license

By Staff Writer

The Cagayan Special Economic Zone and Freeport, also known as Cagayan Freeport, has issued a virtual exchange license to a tokenized securities platform Asia Digital Exchange (ADAX) according to reports.

More significantly, ADAX is planning to launch a fully regulated asset-backed token issuance platform for security token offering (STOs). The news comes on the heels of an STO exchange license — purportedly Asia’s first — awarded to another such platform CEZEX in January.

By getting the Offshore Virtual Currency Exchange License from the free port, which has earned the moniker “Asia’s Crypto Valley” for its blockchain-friendly rules, allows ADAX to become one of the world’s first regulated platforms specializing in tokenized securities backed by assets.

Only a few players have a government-backed license in their hand. They include Gibraltar Exchange in Europe which raised $25nn in equity funding and tZERO Exchange in North America which had raised over $100mn.

ADAX is expected to begin issuing STOs in the second quarter of this while trading is expected to begin in the third quarter, according to reports.

STOs have attracted huge interest over the past year, eclipsing the Initial Coin Offerings (ICOs), which had raised over $6.3bn before the interest fizzled out following huge regulatory backlash around the globe.

STOs have raised just over $650mn since the beginning of 2019 but the potential is seen as enormous, which explains why many players, both new entrants and the established ones like the Singapore Exchange, are working on similar platforms (see here).

Besides the Philippines Cagayan Freeport, the regulators in Thailand have also made subtle yet significant amendments to securities laws that now make it possible to issue and trade STOs and digitized securities in the country (see here).